Updated: White Paper on the Impact of Cyber Insurance on the Technology Market
Technology and the Cyber Insurance Industry – An Update
In May 2015, Evolver released a research paper on the impact the insurance industry will have on the cyber technology market. The paper, titled “And Then the Accountants Showed Up…How the Insurance Industry Will Drive CyberSecurity,” presents ideas on how the growing cyber insurance industry is changing and how companies are addressing cyber challenges.
In the paper, Evolver predicted two main concepts:
- a rapid growth in cyber insurance adoption
- associated use of quantitative cyber risk calculations
Both of these predictions have come true, possibly even faster than anticipated.
The following is an update to the May 2015 paper. It highlights what has happened in the seven months since its release.
Trends in Cyber Insurance that Occurred as Predicted
Cyber Insurance Growth
The paper predicted a rapid growth in cyber insurance across multiple segments. In 2015, there was a major increase in insurance offerings and market expansion. Advisen’s Cyber Liability Insurance Market Trends: Survey of October 2015 indicates that the “cyber insurance market has grown to over $2B in gross written premiums with industry prognosticators forecasting it to double by 2020”.1
Quantification of Cyber Risk
The Evolver paper predicted that the growth of insurance and overall risk programs would create the adoption of quantifiable risk calculations processes and technologies. New products are hitting the market for the quantification of cyber risk such as RiskLens (www.risklens.com). Likewise, major accounting and consulting firms such as Deloitte have started practices in the formal quantification of cyber risks.
Other Trends in the Market
Law Firm Leadership
The research paper mentioned briefly that the legal community would have an increased involvement in the cyber technology area. What has occurred (at a much greater rate than predicted) has been the rise of market leadership out of law firms.
Many law firms, such as Lewis Brisbois Bisgaard & Smith and Wilson Elser Moskowitz Edelman & Dicker, have formed partnerships with insurance companies to provide a variety of services from breach response to risk evaluation. Additionally, law firms are taking the lead in establishing cybersecurity programs for major corporations.
Insurance and Tech Firm Partnerships
Another trend that is moving significantly faster than anticipated has been technology companies aligning with insurance companies for cyber offerings. The best example of this acceleration is the CyberEdge offering from AIG. The CyberEdge program has IBM, RSA, Verizon, K2 Intelligence and others as technical companies that provide a set of preventive tools that can be procured under an AIG umbrella. Other insurance companies are putting together similar portfolios of packaged insurance and preventive tools from third party technology companies.
1Cyber Liability Insurance Market Trends: Survey, Advisen Ltd. October 2015
To read the rest of the whitepaper, click here.